Postal woes: The end of Saturday delivery?

Finally, there is news out of Washington that makes financial sense. But, naturally, there is a catch: Congress could still mess things up.

On Wednesday, the nation's postmaster general announced that the U.S. Postal Service plans to eliminate Saturday home delivery of mail beginning Aug. 1. He said USPS would continue to deliver packages and priority mail in the same way it does now.

It is an action that is long overdue.

Patrick R. Donahoe, postmaster general and CEO of the Postal Service, estimated that the move will save the agency -- which is drowning in red ink -- more than $2 billion annually.

The agency recently reported losses of nearly $16 billion last year, which was a tripling of its losses the previous year. During 2012, the agency defaulted on billions of dollars in retiree health benefit prepayments so that it could avoid bankruptcy.

Making matters worse, the agency has reached its borrowing limit and has little cash on hand.

USPS is an odd quasi-government agency. It is an independent agency in the sense that it gets no tax dollars for its day-to-day operations, but its policies are still subject to congressional oversight and its worker compensation and retirement plans are tied to the federal budget.

Postal Service leaders rightly have been trying to eliminate Saturday delivery for years, but each time it has been blocked by Congress. But the agency's financial plight has become so grave that it is moving ahead with its plans even without first getting congressional approval.

Congress' appropriations bill has always included a ban on going to five-day-a-week delivery, but USPS is currently operating under a temporary spending measure and it wants Congress not to include the restriction when the spending measure expires on March 27. In other words, it wants Congress to do nothing. The body is well-qualified in that regard.

Aside from the obvious cost savings by eliminating Saturday home delivery, this move would allow USPS to retool and concentrate on what it is doing well. Its package delivery operations have increased by 14 percent since 2010.

While increased use of email has contributed to the agency's problems, its primary source of red ink is associated with -- you guessed it -- the rising cost of future retiree health benefits, which made up about $11 billion of the losses. In 2006, Congress required the post office to set aside $55 billion to cover medical costs for retirees. That amounts to $5.5 billion payment each year.

No other government-affiliated agency is required to make such a payment for future medical benefits, although each certainly should be; assuming, of course, that we actually want the funds to be there when they have been promised to employees.

To be fair, USPS has cut costs by about $15 billion since 2006 by reducing the size of its workforce and consolidating mail processing locations.

Doing away with Saturday delivery is a no-brainer and should be implemented in August, but USPS needs a top-to-bottom reform and an operations plan based on a sound financial model that is prudent about its future promises.